U.S. to End Contentious Phone Tax

Levy Based on the Distance
Of the Call to Stop July 31;
Refunds to Go Back 3 Years

By

Robert Guy Matthews

Updated May 26, 2006 12:01 a.m. ET

WASHINGTON -- The Treasury is conceding defeat in its battle to collect a long-distance telephone tax enacted to pay for the Spanish-American War, paving the way for business and individual taxpayers to get refunds, plus interest, going back three years.

The "telephone tax," which will be terminated July 31, imposed a 3% surcharge on consumers based on distance of the call. But today telecommunication companies don't price long-distance calls based on distance. Businesses argued that the tax was illegal, and the...